DeathandTaxes.com

PENNSYLVANIA - Insurable Interest Laws

As of August 1, 2007
Most recent legislation changes:  December 23, 2003

§ 512.  Application for insurance; insurable interest

   No policy of life insurance shall be delivered in this Commonwealth except upon the application of the person insured. A person liable for the support of a child may take out a policy of insurance on such child; and persons, copartnerships, associations, corporations, and the trustee of a trust established by a person, copartnership, association or corporation providing benefits to its officers, directors, principals, partners or employes may insure the lives and health of officers, directors, principals, partners, and employes, without the signing of a personal application as hereinbefore required: Provided, That such persons, copartnerships, associations, corporations and the trustee of a trust established by a person, copartnership, association or corporation shall notify such officers, directors, principals, partners and employes in writing of the intent to purchase a policy of life insurance insuring the lives of such officers, directors, principals, partners or employes and obtain the prior written consent of such officers, directors, principals, partners or employes. Any person may insure his own life for the benefit of any person, copartnership, association, corporation, or trustee of a trust established by a person, copartnership, association or corporation, but no person shall cause to be insured the life of another, unless the beneficiary named in such policy or agreement of life insurance, whether himself or a third person, has an insurable interest in the life of the insured. If a policy of life insurance has been issued in conformity with this section, no transfer of such policy or any interest thereunder shall be invalid by reason of a lack of insurable interest of the transferee in the life of the insured or the payment of premiums thereafter by the transferee. The term "insurable interest" is defined as meaning, in the case of persons related by blood or law, an interest engendered by love and affection, and, in the case of other persons, a lawful economic interest in having the life of the insured continue, as distinguished from an interest which would arise only by the death of the insured. A charitable organization that meets the requirements of section 501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)), as amended, may own or purchase life insurance on an insured who consents to the ownership or purchase of that insurance.

 

This information does not constitute legal advice by the Insurance Barometer LLC and should not be relied upon as such. Every effort has been made to provide correct and accurate information but the reader should verify state laws prior to implementing an insurance program.